SECURITIES PURCHASE AGREEMENT
THIS SECURITIES PURCHASE AGREEMENT (this "Agreement"), dated as of May
21, 2003, by and between Galaxy Nutritional Foods, Inc., a Delaware
corporation, with its principal place of business at 0000 Xxxxxxxx Xxx,
Xxxxxxx, XX 00000 (the "Company"), and Xxxx XxXxxx, whose address is 000
Xxx Xxxxx, Xxxxxxx, XX 00000 (the "Buyer").
PRELIMINARY STATEMENTS
A. The Company has authorized the sale of a certain number of shares
of the Company's common stock, par value $0.01 per share (the "Common
Stock") on the terms and subject to the conditions set forth in this
Agreement;
B. The Company and Buyer are executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by
Rule 506 under Regulation D ("Regulation D") as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities
Act of 1933, as amended (the "1933 Act");
C. Buyer wishes to purchase, in the amounts and upon the terms and
conditions stated in this Agreement, shares of Common Stock;
D. Upon the closing of the transactions contemplated hereby, the
parties hereto will execute and deliver a Registration Rights Agreement in
substantially the form attached hereto as Exhibit A (the "Registration
Rights Agreement") pursuant to which the Company agrees to provide certain
registration rights under the 1933 Act and the rules and regulations
promulgated thereunder, and applicable state securities laws; and
E. The Company intends to enter into other agreements substantially
in the form of this Agreement and Registration Rights Agreement with
certain other buyers (the "Other Buyers") and expect to the complete the
sale of shares of Common Stock to them; however, the Buyer's obligations
hereunder are not expressly conditioned on the purchase by any or all of
the Other Buyers of the Common Stock that they may agree to purchase from
the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and
the Buyer hereby agree as follows:
1. PREAMBLES; PURCHASE AND SALE OF COMMON STOCK; CLOSING
a. Preliminary Statements. The above preliminary statements,
recitals, definitions, preamble and provisions are true and correct and are
incorporated herein as fully as if set forth herein.
b. Purchase of Common Stock. Subject to the terms and
conditions set forth in this Agreement, the Company agrees to issue and
sell to Buyer, and Buyer agrees to purchase from the Company such number of
shares of Common Stock (the "Securities") as shall be determined by
dividing the aggregate purchase price of $1,000,000 (the "Purchase Price")
by the per share purchase price (with any fractional shares being rounded
up to the next whole share). The per share purchase price shall be equal
to the lesser of (x) 95% of the average of the closing bid price of the
Common Stock on the Principal Market (as defined below) (as reported by
Bloomberg L.P.) for the Trading Days (as defined below) occurring during
the thirty (30) consecutive calendar days ending on the calendar day
immediately prior to the date of Closing (as defined below), or (y) $1.80.
The term "Principal Market" shall mean the American Stock Exchange, the New
York Stock Exchange, the NASDAQ National Market, or the NASDAQ SmallCap
Market, whichever is at the time the principal trading exchange or market
for the Common Stock, based upon share volume, or if the Common Stock is
not traded on an exchange or market, the OTC Bulletin Board or its
successor (as of the date hereof the Principal Market is the American Stock
Exchange). The term "Trading Day" shall mean any day during which the
Common Stock is traded on the Principal Market. The consummation of the
transaction and the payment of the Purchase Price shall occur at Closing
(as defined below).
c. Escrow. Within two (2) business days following Buyer's
execution of this Agreement, Buyer shall deliver to Gibralter Bank, F.S.B.,
as escrow agent ("Escrow Agent"), an amount equal to the Purchase Price
(the "Escrow Amount") by wire transfer of immediately available United
States Dollars in accordance with the instructions set forth in the Escrow
Agreement dated as of the date hereof by and among the Company, Buyer and
Escrow Agent (the "Escrow Agreement"). Escrow Agent shall hold and
disburse the Escrow Amount in accordance with the terms and conditions of
the Escrow Agreement.
d. The Closing. The closing ("Closing") of the sale and
purchase of the Securities under this Agreement is contingent upon the
Company's repayment in full of the existing debt owed to (x) FINOVA Capital
Corporation pursuant to that certain Security Agreement dated as of
November 1, 1996, as amended, and (y) FINOVA Mezzanine Capital Inc.
pursuant to that certain Loan Agreement dated as of September 30, 1999, as
amended (the "FINOVA Repayment"). The FINOVA Repayment shall be subject to
and in accordance with the terms of the Escrow Agreement. The Closing
shall take place at the offices of Xxxxx & Xxxxxxxxx LLP, 200 South Orange
Avenue, Suite 2300, SunTrust Center, Xxxxxxx, Xxxxxxx 00000, as of the date
of the FINOVA Repayment. The consummation of the transaction and the
payment of the Purchase Price shall occur at Closing, as follows:
(i) Release of Escrow Amount. Escrow Agent shall release
the Escrow Amount as provided in the Escrow Agreement.
(ii) Delivery of Stock Certificate(s). Against payment to
the Company of the Purchase Price therefor, the Company shall direct its
stock transfer agent to deliver to Buyer one or more stock certificates,
duly executed on behalf of the Company, representing the Securities being
purchased by Buyer, registered in the name of Buyer, such delivery to Buyer
to be made not later than five (5) business days after the Closing.
2. BUYER'S REPRESENTATIONS AND WARRANTIES
Buyer represents and warrants to the Company that:
a. Investment Purpose. The Securities are being acquired by
Buyer in good faith solely for its own account, for investment purposes
only, and are not being purchased for resale, resyndication, distribution,
subdivision or fractionalization thereof; Buyer has no contract or
arrangement with any person to sell, transfer or pledge to any person the
Securities or any part thereof, any interest therein or any rights thereto;
Buyer has no present plans to enter into any such contract or arrangement;
and Buyer understands that as a result it must bear the economic risk of
the investment for an indefinite period of time because the Securities have
not been registered under the 1933 Act, and, therefore, cannot be sold
unless they are subsequently registered under the 0000 Xxx.
b. Accredited Investor Status. Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D.
c. Reliance on Exemptions. Buyer understands that the
Securities are being offered and sold to it under the exemption from the
registration requirements of the United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and
Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of Buyer
to acquire the Securities.
d. Information. Buyer understands and acknowledges that it is
purchasing the Securities without being furnished any offering literature,
prospectus or other materials other than copies of the SEC Documents (as
defined hereinbelow), that this transaction has not been scrutinized by the
SEC or by any administrative agency charged with the administration of the
securities laws of any state, that all documents, records and books,
pertaining to the Company, its business, finances and operations, and this
investment have been made available to Buyer, and its advisors and
representatives, including its attorney, its accountant and/or its
purchaser representative, and that the books and records of the Company
will be available upon reasonable notice for inspection by Buyer during
reasonable business hours at the Company's principal place of business.
Buyer and its advisors and representatives, including its attorney, its
accountant and/or its purchaser representative, if any, have reviewed the
SEC Documents and been afforded the opportunity to ask questions of the
Company and have received complete and satisfactory answers to any such
inquiries. Buyer understands that its investment in the Securities is
speculative and involves a high degree of risk of loss and that Buyer must
be prepared to lose its entire investment in the Company. Buyer has sought
such accounting, legal and tax advice, as it has considered necessary to an
informed investment decision with respect to its acquisition of the
Securities. Buyer, or Buyer together with its purchaser representative, if
any, have such knowledge and experience in financial and business matters
that it and such representative are capable of evaluating the merits and
risks of an investment in the Securities and of making an informed
investment decision.
e. Governmental Review. Buyer understands that no United
States federal or state agency or any other government or governmental
agency has approved or disapproved or passed on or made any recommendation
or endorsement of the Securities or the fairness or suitability of the
investment in the Securities, nor have such authorities passed upon or
endorsed the merits of the offering of the Securities or the accuracy or
adequacy of any of the information provided by the Company to Buyer
regarding the Company, the Securities or any other matter, and that the
Company is relying on the truth and accuracy of the representations,
declarations and warranties herein made by Buyer in offering the Securities
for sale to it without having first registered the same under the 1933 Act.
f. Transfer or Resale. Buyer understands that, except as
provided in the Registration Rights Agreement, (i) the Securities have not
been and are not being registered under the 1933 Act or any state
securities laws, and may not be transferred unless (a) subsequently
registered thereunder, or (b) Buyer shall have provided the Company with a
statement of the circumstances surrounding the proposed disposition and
shall have delivered to the Company an opinion of counsel, reasonably
satisfactory in form, scope and substance to the Company, to the effect (1)
that the Securities to be sold or transferred may be sold or transferred
pursuant to an exemption from such registration and (2) that appropriate
action necessary for compliance with the 1933 Act has been taken; (ii) any
sale of such Securities made in reliance on Rule 144 promulgated under the
1933 Act may be made only in accordance with the terms of said Rule and
further, if said Rule is not applicable, any resale of such Securities
under circumstances in which the seller (or the person through whom the
sale is made) may be deemed to be an underwriter (as that term is defined
in the 0000 Xxx) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii)
neither the Company nor any other person is under any obligation to
register such Securities under the 1933 Act or any state securities laws or
to comply with the terms and conditions of any exemption thereunder.
g. Legends. Buyer understands that the stock certificates
representing the Securities shall bear a restrictive legend in
substantially the following form (and a stop-transfer order shall be placed
against transfer of such stock certificates):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE REOFFERED, SOLD, TRANSFERRED,
PLEDGED, OR ASSIGNED IN THE ABSENCE OF (A) AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER SAID
ACT AND THE STATE SECURITIES ACT OR BLUE SKY ACT OF ANY
STATE HAVING JURISDICTION THEREOF, OR (B) AN OPINION OF
COUNSEL, REASONABLY SATISFACTORY IN FORM, SCOPE AND
SUBSTANCE TO THE COMPANY, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR THE SECURITIES ACT OR BLUE
SKY ACT OF ANY STATE HAVING JURISDICTION WITH RESPECT
THERETO.
h. Authorization; Enforcement. This Agreement, the Escrow
Agreement and the Registration Rights Agreement have been duly and validly
authorized, executed and delivered on behalf of Buyer and are valid and
binding agreements of Buyer enforceable in accordance with their terms,
subject as to enforceability to general principles of equity and to
bankruptcy, insolvency, moratorium, and other similar laws affecting the
enforcement of creditors' rights generally.
i. Domicile. If Buyer is an individual, Buyer is a resident
of, or if Buyer is an entity, Buyer's principal place of business is
located in, the State of Connecticut.
j. Indemnification. Buyer acknowledges that Buyer understands
the meaning and legal consequences of the representations and warranties in
this Section 2, and that the Company has relied upon such representations
and warranties, and Buyer hereby agrees to indemnify and hold harmless the
Company and its officers, directors, shareholders, agents and
representatives from and against any and all claims, demands, losses,
damages, expenses or liabilities (including attorneys' fees) due to or
arising out of, directly or indirectly, a breach of any such
representations or warranties. Notwithstanding the foregoing, however, no
representation, warranty, acknowledgment or agreement made herein by Buyer
shall in any manner be deemed to constitute a waiver of any rights granted
to such Buyer under federal or state securities laws.
k. Short Position and Market Purchases. Buyer is not
purchasing the Securities for the purpose of covering any short position in
the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Buyer that:
a. Organization and Qualification. The Company is a
corporation duly organized and existing in good standing under the laws of
the State of Delaware, and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company is duly qualified as a foreign corporation to do business and is in
good standing in every jurisdiction in which the nature of the business
conducted by it makes such qualification necessary and where the failure so
to qualify would have a material adverse effect on the operations,
properties or financial condition of the Company taken as a whole (a
"Material Adverse Effect").
b. Authorization; Enforcement. (i) The Company has the
requisite corporate power and authority to enter into and perform this
Agreement and the Registration Rights Agreement and to issue the Securities
in accordance with the terms hereof and thereof, (ii) the execution and
delivery of this Agreement and the Registration Rights Agreement by the
Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by the Company's Board of Directors and no
further consent or authorization of the Company, its Board of Directors, or
its stockholders is required, (iii) this Agreement and the Registration
Rights Agreement have been duly executed and delivered by the Company, and
(iv) this Agreement and the Registration Rights Agreement constitute the
valid and binding obligations of the Company enforceable against the
Company in accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors' rights and remedies or by other equitable
principles of general application.
c. Capitalization. As of the date of this Agreement, the
authorized capital stock of the Company consists of (i) 85,000,000 shares
of Common Stock of which 12,761,685 shares were issued and outstanding, and
(ii) 1,000,000 shares of preferred stock, $.01 par value, of which 200,000
shares have been designated "Series A Preferred Stock," 57,384 of which
were issued and outstanding. All of such outstanding shares have been
validly issued and are fully paid and nonassessable. Except as set forth
in the SEC Documents (as defined herein) or in Schedule 3.c. attached
hereto, as of the date of this Agreement (i) there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible
into, any shares of capital stock of the Company, or arrangements by which
the Company is or may become bound to issue additional shares of capital
stock of the Company, and (ii) there are no agreements or arrangements
under which the Company is obligated to register the sale of any of its
securities under the 1933 Act other than agreements with respect to
securities which have been previously registered or are subject to current
registration statements.
d. Issuance of Securities. The Securities are duly authorized
and, upon issuance in accordance with the terms hereof, shall be validly
issued, fully paid and non-assessable, and free from all taxes, liens and
charges with respect to the issue thereof.
e. No Conflicts. The execution, delivery and performance of
this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby will not (i) result in any violation of
the Company's Certificate of Incorporation, as amended, as in effect on the
date hereof ("Certificate of Incorporation") or the Company's Bylaws, as in
effect on the date hereof (the "Bylaws") or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement,
indenture or instrument to which the Company is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations) applicable to
the Company or by which any property or asset of the Company is bound or
affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually or
in the aggregate, have a Material Adverse Effect). The business of the
Company is not being conducted in violation of any law, ordinance,
regulation of any governmental entity, except for possible violations which
either singly or in the aggregate do not have a Material Adverse Effect.
Except as required under the 1933 Act and any applicable state securities
laws, the Company is not required to obtain any consent, authorization or
order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of
its obligations under this Agreement in accordance with the terms hereof.
f. Common Stock. The Company has registered its Common Stock
pursuant to Section 12(b) or (g) of the 1934 Act (as defined below) and is
in full compliance with all reporting requirements of the 1934 Act, and the
Company is in compliance with all requirements for the continued listing or
quotation of its Common Stock, and such Common Stock is currently listed or
quoted on, the Principal Market. As of the date hereof, the Principal
Market is the American Stock Exchange, and except as set forth in the SEC
Documents, the Company has not received any notice regarding, and to its
knowledge there is no threat of, the termination or discontinuance of the
eligibility of the Common Stock for such posting or listing.
g. SEC Documents, Financial Statements. During the Company's
last two (2) fiscal years, the Company has filed all reports, schedules,
forms, statements and other documents required to be filed by it with the
SEC pursuant to the reporting requirements of the Securities Exchange Act
of 1934, as amended (the "1934 Act") (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits) incorporated by
reference therein, being hereinafter referred to herein as the "SEC
Documents"). The Company has delivered to Buyer true and complete copies
of the SEC Documents, except for such exhibits, schedules and incorporated
documents. As of their respective dates, subject to, with respect to
certain SEC Documents, the filing of an amendment to such SEC Documents,
the SEC Documents complied in all material respects with the requirements
of the 1934 Act and the rules and regulations of the SEC promulgated
thereunder applicable to the SEC Documents, and none of the SEC Documents,
at the time they were filed with the SEC, contained any untrue statement of
a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of their
respective dates, the financial statements of the Company included in the
SEC Documents complied as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
with respect thereto. Such financial statements have been prepared in
accordance with generally accepted accounting principles, consistently
applied, during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto, or (ii) in the
case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in
all material respects the financial position of the Company as of the dates
thereof and the results of its operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-
end audit adjustments). No other information provided by or on behalf of
the Company to Buyer and referred to in Section 2(d) of this Agreement
contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements therein, in the
light of the circumstance under which they are or were made, not
misleading.
h. No Material Adverse Change. Since December 31, 2002, there
has not been any material adverse change in the Company's business, results
of operations, or financial condition, other than changes resulting from
general economic conditions or general economic trends, except as reflected
in the SEC Documents filed at least five (5) days prior to the date hereof.
i. Absence of Litigation. Except as disclosed in the SEC
Documents, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge
of the Company, threatened against the Company, wherein an unfavorable
decision, ruling or finding would have a Material Adverse Effect or which
would adversely affect the validity or enforceability of, or the authority
or ability of the Company to perform its obligations under, this Agreement
or any of the documents contemplated herein.
4. COVENANTS
a. Form D. The Company agrees to file a Form D with respect to
the Securities as required under Regulation D and to provide a copy thereof
to Buyer promptly after such filing.
b. Reporting Status. Until the earlier of (i) the date as of
which Buyer may sell all the Securities without restriction pursuant to
Rule 144(k) promulgated under the 1933 Act, or (ii) the date on which Buyer
has sold all of the Securities, the Company shall file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company shall
not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination. Buyer shall give notice to the Company when it
has sold all of the Securities.
c. Listing of Securities. The Company shall cause the
Securities to be listed on the Principal Market prior to the Closing.
5. TRANSFER AGENT INSTRUCTIONS
Buyer acknowledges that the Securities shall be "restricted"
securities, that the Stock Certificates shall bear the restrictive legend
specified in Section 2(g) of this Agreement, and that stop-transfer
instructions have been given by the Company to its transfer agent with
respect to the Securities. If Buyer provides the Company with an opinion
of counsel, reasonably satisfactory in form, scope and substance to the
Company, that registration of a resale by Buyer of any of the Securities is
not required under the 1933 Act or any applicable state securities or blue
sky laws, the Company shall permit the transfer and promptly instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by Buyer.
6. TERMINATION
a. Termination. This Agreement may be terminated as follows:
(i) at any time prior to Closing, by mutual written consent
of all of the parties to this Agreement, whereupon Buyer and the Company
shall deliver to Escrow Agent joint written instructions to release the
Escrow Amount to Buyer;
(ii) at any time after July 15, 2003, by Buyer, if the
Closing has not been effected on or prior to such date and if Buyer is not
then in breach of any term of this Agreement, pursuant to written notice by
Buyer to the Company and the Escrow Agent; or
(iii) at any time after July 15, 2003, by the Company,
if the Closing has not been effected on or prior to such date, if the
Company is not then in breach of any term of this Agreement, pursuant to
written notice by the Company to Buyer and the Escrow Agent.
b. Effect of Termination. All obligations of the parties
hereunder shall cease upon any termination pursuant to Section 6.a.,
provided, however, that the provisions of Sections 6.c. and 7 hereof shall
survive any termination of this Agreement.
c. Treatment of Escrow Amount Upon Termination. If this
Agreement is terminated pursuant to its terms, the Escrow Amount shall be
treated as set forth in the Escrow Agreement.
7. GOVERNING LAW; MISCELLANEOUS
a. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Florida without
regard to the principles of conflict of laws.
b. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party. In the event any signature
page is delivered by facsimile transmission, the party using such means of
delivery shall cause three (3) additional original executed signature pages
to be physically delivered to the other party within five (5) days of the
execution and delivery hereof.
c. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.
d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this
Agreement in any other jurisdiction.
e. Entire Agreement; Amendments. This Agreement and the
instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except
as specifically set forth herein or therein, neither the Company nor any
Buyer makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or
amended other than by an instrument in writing signed by the party to be
charged with enforcement.
f. Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by mail or delivered
personally or by courier and shall be effective five days after being
placed in the mail, if mailed, certified or registered, return receipt
requested, or upon receipt, if delivered personally or by courier, in each
case addressed to a party. The addresses for such communications shall be:
If to the Company: Galaxy Nutritional Foods, Inc.
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xx. Xxxxxxxxxxx X. New
With a copy to: Xxxxx & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
If to Buyer: Xxxx XxXxxx
000 Xxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each party shall provide notice to the other party of any change in
address.
g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
assigns. Neither the Company nor Buyer shall assign this Agreement or any
rights or obligations hereunder without the prior written consent of the
other (which consent may be withheld for any reason in the sole discretion
of the party from whom consent is sought).
h. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted successors
and assigns, and is not for the benefit of, nor may any provision hereof be
enforced by, any other person.
i. Survival. The representations and warranties of the Buyer
and the Company contained in Sections 2 and 3, respectively, shall survive
the Closing for a period of one (1) year thereafter, provided however that
the representations and warranties of Buyer contained in Sections 2.a.,
2.b. and 2.h. shall survive the Closing indefinitely.
k. Publicity. The Company and Buyer shall have the right to
approve before issuance any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however,
that the Company shall be entitled, without the prior approval of Buyer, to
make any press release with respect to such transactions as the Company
determines is required by applicable law and regulations.
l. Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments
and documents, as the other party may reasonably request in order to carry
out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.
m. Expenses. Subject to a maximum of $5,000.00, the Company
shall pay the reasonable fees, expenses and disbursements of Buyer's legal
counsel arising in connection with the negotiation, execution and
consummation of this Agreement, the Escrow Agreement, the Registration
Rights Agreement and the agreements and transactions contemplated by such
agreements.
[SIGNATURES APPEAR ON FOLLOWING PAGE]
IN WITNESS WHEREOF, Buyer and the Company have caused this Securities
Purchase Agreement to be duly executed as of the date first written above.
"Company"
GALAXY NUTRITIONAL FOODS, INC.
By: /s/ Xxxxxxxxxxx X. New
----------------------
Xxxxxxxxxxx X. New
Chief Executive Officer
"Buyer"
/s/ Xxxx XxXxxx
---------------------------
Xxxx XxXxxx
